SEC Charges Crypto Trader With Defrauding Students of $1.2 Million

Published: Feb 2, 2024
Written By:
Vignesh Karunanidhi
Milk Road Writer

The U.S. Securities and Exchange Commission (SEC) charged crypto trader Brian Sewell and his firm Rockwell Capital Management with fraudulently soliciting $1.2 million from students under false pretenses and losing the money to hackers.

Key details of the SEC complaint:

  • Sewell allegedly promised students AI-powered crypto hedge fund returns through his “Rockwell Fund.”
  • 15 students provided $1.2 million to Sewell from 2018–2019 that was never invested.
  • SEC: Sewell held funds in Bitcoin, but wallets were hacked.
  • The settlement has Sewell and the firm paying over $1.8 million in penalties and disgorgement.

According to the SEC complaint, Sewell touted robust artificial intelligence and crypto trading technologies to students of his American Bitcoin Academy course as powering a to-be-launched fund called the Rockwell Fund. Additionally, Sewell allegedly claimed advanced strategies involving digital assets would drive investor returns.

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SEC says least 15 students provided $1.2 million

At least 15 students provided Sewell about $1.2 million in investment capital meant for the Phantom Rockwell Fund from 2018 to 2019. However, the SEC found the fund was never actually created, nor were technologies like AI implemented. Instead, the agency claimed that Sewell kept the money in Bitcoin wallets, which eventually fell victim to hacking.

“Sewell defrauded students in his online American Bitcoin Academy of over a million dollars through a series of lies about investment opportunities in his purported crypto hedge fund,” said SEC enforcement director Gurbir Grewal.

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To settle the charges, Sewell and his company have agreed to injunctive relief, including the disgorgement of around $1.6 million in ill-gotten gains. Sewell himself will also pay an additional $223,000 civil penalty.

Vignesh Karunanidhi

Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.

Vignesh Karunanidhi
Milk Road Writer
Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.